The truth was disclosed on February 1, 2022, when PayPal reported disappointing fourth quarter and full year 2021 results. In addition, investors were unaware of the lengths the Company was going to keep inactive customers and fake bot accounts on the platform to prevent churn and inflate its NNA guidance, which would have provided a more realistic view of the true demand for the Company’s platform. Specifically, PayPal failed to disclose that its aggressive cash incentive campaigns significantly increased PayPal’s susceptibility to bot farms that were able to systematically take advantage of PayPal’s $10.00 account opening by creating millions of illegitimate accounts, which ultimately generated no future revenue for the Company. However, the Company failed to disclose that many of the additional users acquired through its cash account creation incentive campaigns were illusory, because those incentive campaigns were easily susceptible to fraud. In 2021, the Company offered ten dollars to customers who opened new accounts on the platform. In order to increase the NNA metric, PayPal offered cash marketing incentives to customers for new account openings. That’s because in theory, the more accounts on the platform, the more opportunity there will be to earn transaction fees from the ever-increasing number of accounts. (PYPL) Inflated Net New Active Accounts Metric Guidance and Hid the Company's Declining Levels of EngagementĪccording to the complaint, throughout the class period, PayPal touted the massive growth in its Net New Active Accounts (NNAs) and instructed investors to value the high growth in this metric as one of the most important indicators of how the Company was performing. What is this Case About: PayPal Holdings, Inc. If you would like more information about PayPal Holdings, Inc.'s misconduct, click here. You do not have to participate in the case to be eligible for a recovery.Īll representation is on a contingency fee basis. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Shareholders who want to be appointed lead plaintiff for the class must file their papers by December 4, 2022. stock between Februand February 1, 2022, they may be eligible to participate in the class action against PayPal. 10, 2022 (GLOBE NEWSWIRE) - Robbins LLP reminds investors who acquired shares of PayPal Holdings, Inc.
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